ACE Enhances Shareholder Value – Analyst Blog

Filed in dividend, Gold Prices, lead, recession, swiss franc, ubs by on May 20, 2010 0 Comments

The board of directors of ACE Limited ( ACE ) announced a 6.5% increase in the quarterly dividend as a part of the company’s consistent effort to enhance shareholder value. ACE will now pay a quarterly dividend of 33 cents ($1.32 on an annualized basis), up from 31 cents ($1.24 on an annualized basis) paid on April 12, 2010. The increased dividend will be paid on August 17, 2010, to shareholders of record as of July 27, 2010. The company intends to distribute the dollar-denominated dividend via par value reduction in four installments, thereby adjusting the amount of each quarterly dividend in Swiss francs (CHF) up or down to equal $0.33 at the time of payment, subject to an aggregate cap for the four installments of CHF 2.16. The par value of the company is currently CHF 31.55 per share. The par value of a share will be reduced concurrent to dividend installment by the CHF equivalent of $0.33 based on the USD/CHF rate published on July 22, 2010. The board of directors of ACE decided that the first installment of the increased dividend will be made by the company’s transfer agent in U.S. dollars (USD) subject to a required filing with the Swiss Commercial Register. The industry’s statutory capital levels plummeted during the last few years due to recessionary conditions leading to liquidity challenges for some companies. In this weak liquidity scenario, ACE appears to have a strong capital and liquidity position, helping it increase the quarterly dividend. ACE remains strong with respect to its cash position and cash inflow, significantly supporting the asset side of its balance sheet. The cash balance at the end of the first-quarter 2010 was $726 million, higher than $669 million at the end of the fourth-quarter 2009. Cash inflow in the first quarter of 2010 totaled $823 million, substantially higher than $562 million in the prior-year quarter, driven by improved net collections of insurance and reinsurance balances. Significant natural catastrophes, sustained recessionary impact and competitive market conditions significantly hurt the property & casualty insurers during the last few quarters. ACE’s modest

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ACE Enhances Shareholder Value – Analyst Blog

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